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Introduction to

Project Management

Course Delivery and


Grading

This is a full credit course.


We would cover it in total 12 to 13 sessions
University Examination is of 100 marks.
University paper is of three hours. Earlier it
used to be of four hours.
Usually there are seven to nine questions and
you are expected to solve any five.
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SESSION TODAY

BRIEF HISTORY OF PROJECT MANAGEMENT


DEFINITION OF PROJECT MANAGEMENT
ATTRIBUTES / CHARACTERISTICS OF PROJECT
MANAGEMENT
EXAMPLES
PROJECT MANAGEMENT FRAMEWORK
PROJECT AND PROJECT ENVIRONMENT
PM TOOLS AND ADVANTAGES OF PM
DIFFERENT STAGES OF PM
DUTIES OF PROJECT MANAGER, PM AS AN ENTREPRENEUR
PM V/S GM
PM AND OTHER DISCIPLINES
TYPES OF ORGANIZATIONS
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History of Project
Management

Project approach has long been the style of doing business


or implementing or undertaking tasks particularly in
construction industry.
In 1917 Henry Gantt developed the Gantt chart as a tool
for scheduling work in job shops.
Modern project management began with the Manhattan
Project, which the U.S. military led to develop the atomic
bomb
In 1958, US Navy developed PERT charts
In the 1970s, the military began using project
management software, as did the construction industry.
By the 1990s, virtually every industry was using some form
of project management
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WHAT IS A PROJECT?
WEBSTERS DICTIONARY:

A proposal of something to be done, Plan;


scheme, an undertaking; specific task,
A special unit of work, research, etc. as in
school, a laboratory, etc.
An extensive public undertaking, as in
conservation, construction, etc.
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What Is a Project?

A project is a temporary endeavor


undertaken to accomplish a unique purpose
A project is a carefully defined set of
activities that use resources (money, men,
materials, machines, energy, provisions,
communication, etc.) to meet the predefined objectives.
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Attributes of projects

Unique definable single purpose.


Temporary, one time activity, never to be exactly repeated.
Require resources, often from various areas.
Teams are formed for a purpose and disbanded after achieving the
purpose.
Projects cut across the organizational lines; many disciplines are
involved.
Should have a primary sponsor and/or customer / stake holder/s
Involve uncertainty and unfamiliarity, does not fall under the
routine category of activity
Project is the process of working to achieve a pre-defined goal
and during the process, the project may pass through various
phases
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EXAMPLES

Pyramid of Egypt (2500 B.C. 2.3 Mn. Stone blocks


weighing 2 to 70 tons each, quarried and carried over the
Niles, height equivalent of 40 storey building, 13 acres of
land, deviation of less than an inch in levels, stones fixed
with accuracy of .04 inch!!)
100,000 laborers, 40,000 skilled masons, over 150,000
women & children to be housed & fed!
Numerous other examples like Taj Mahal, Eiffel tower,
international space station by NASA, anti missile system
developed by India, etc.
From construction, information technology to research,
projects could be conceived in all possible fields.
Each project is unique in many ways.

EXAMPLES contd.

AT CORPORATE LEVEL:
- Restructuring
- Relocation / Diversification (new plant) or Expansion
- Acquisition / Merger
- New product or system development
AT FAMILY / PERSONAL LEVEL:
- Remodeling of a home
- Wedding
- Moving to another house
MOST ARTISTIC ENDEAVOURS ARE PROJECTS!!
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EXAMPLES contd.

MOST ARTISTIC ENDEAVOURS ARE


PROJECTS!! (Taj Mahal, Statue of Liberty,
Eiffel tower, etc.)
Saving human life in the event of natural
calamities / Disasters is also a project.
(Earthquake in Gujarat or Maharashtra, Tsunami,
Nuclear fall out at Chernobyl, etc.).
Social uplift programs, Family Planning, AIDS
control, etc.
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TYPES OF PROJECTS

Manufacturing projects
Civil engineering, construction, petrochemical,
mining, infrastructure and other projects
requiring external organisation
Management projects
Greenfield Projects for setting up new
establishments
Scientific Research Projects
Systems Development Projects

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EXCEPTIONS..

Building a skyscraper is a project; but mass


construction of pre-fabricated homes is a
scheduled and repetitive task rather than a
project.
Repetitive work of accounts and audits is not a
project.
Exploratory mission to Mars or Moon are
projects; conducted tours to tourist places are
not projects.

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The Triple Constraint

Every project is constrained in different ways by its


Scope goals: Quantity & Quality
Time goals
Cost goals
It is the project managers duty to balance these
three often competing goals.
The Project Management Triangle
The discipline of project management is about
providing the tools and techniques that enable the
project team (not just the project manager) to organize
their work to meet these constraints.
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The Triple Constraint of


Project Management

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Competing goals are


now five

Scope
Time
Cost
Risk
Quality
Stakeholders with different needs and
expectations.
Identified requirements
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What is Project Management?


Project management is the
application of knowledge, skills, tools,
and techniques to project activities in
order to meet or exceed stakeholder
needs and expectations from a project
(PMI)*,
*The Project Management Institute (PMI) is an international
professional society. They have over 2400 members spread over 160
countries. Their web site is www.pmi.org.
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CHARACTERISTICS OF PROJECTS

Project can be described as a unique set of co-ordinated and


inter-related activities undertaken by an organisation to meet
defined objectives; that has an agreed start and finish time; is
constrained by cost & resources and has specified
performance requirements.
Projects are unique in nature. Everything is special and oneoff. Designs are new and usually unproven. Every industrial
or commercial project is a risk venture. The job of the
manager is to identify the risks and, through his project
management, contain them. The application of techniques
and management practices that have been developed will
depend on the size and type of project, and upon the relative
priorities, which are assigned to the cost, time and
performance objectives.
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CHARACTERISTICS
OF PROJECTS

Project has a definite start and finish (Scope goals


quantity and quality and Time goals).
Project consists of a well-defined and unique collection
of jobs, activities, or tasks which when complete; mark
the end of project.
Project is constrained by cost, time & resources and has
specified performance requirements.
The jobs may be started or stopped independent of each
other, within a overall given sequence.
The jobs are ordered - i.e., they must be performed in
technological order.
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WHO ARE
THE STAKE HOLDERS
IN
AN INDUSTRIAL
PROJECT?
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Project Stakeholders

Stakeholders are the people involved in or affected by


project activities
Stakeholders include

The project sponsor or promoter, equity / share holders


Project team,
Support staff,
Customers / users,
Suppliers / Vendors / Sub-contractors,
Financial Institutions / lenders / bankers
Govt. / Approving authorities
Affected population / opponents to the project
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PROJECT MANAGEMENT
FRAMEWORK

Understand the needs and expectations of


various stakeholders.
Set the goals viz. scope, time and cost
parameters for the project.
Deploy nine knowledge areas to achieve the
goals / purpose of the project.
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Project Management Knowledge Areas

Knowledge areas describe the key competencies


that project managers must develop

Four core knowledge areas lead to specific project


objectives (scope, time, cost, and quality)
Four facilitating knowledge areas are the means
through which the project objectives are achieved
(human resources, communication, risk, and
procurement management)
One knowledge area (project integration
management) affects and is affected by all of the
other knowledge areas

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Project Management
Framework
T
T

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Project Management
Tools and Techniques

Project management tools and techniques assist project


managers and their teams in various aspects of project
management
Some specific tools include
Project Charter and Work Breakdown Structure WBS (scope)
Gantt charts, PERT charts, critical path analysis
(time)
Cost estimates and Earned Value Analysis (cost)
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Advantages of Project Management

Bosses, customers, and other stakeholders do not like


surprises.
Good project management (PM) provides assurance and
reduces risk.
PM provides the tools and environment to plan, monitor,
track, and manage schedules, resources, costs, and quality.
PM provides a history or metrics base for future planning as
well as good documentation.
Project members learn and grow by working in a crossfunctional team environment

Source: Knutson, Joan, PM Network, December 1997, p. 13

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PROJECTIZING THE ORGANIZATION


Today, the definition of a project is no more confined to engineering,
technology and research; But has expanded to include various fields /
situations, one time crisis, and dealing with difficult issues.
It has been realised that the solution to majority of corporate
problems involves obtaining better control and optimum use of
existing corporate resources. Project Management is one of the
techniques that can be used to achieve this purpose.
Project management is being used by a wide range of disciplines and
corporations that had never previously considered it as a viable
method of performing work
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PROJECTIZING THE ORGANIZATION


Legal offices, hospitals, banking and other services as well
as traditional manufacturing firms are increasingly using
project management to improve the delivery of their
services or for creation of new products. Some typical
examples are:
Annual budgeting / auditing exercises
Introduction of new systems (ISO 9000)
Effecting change in structure, staffing, or style of Organization
Software development & implementation
Development of new product / Service Campaign for new product
launch / election
Organizing AGM / sales conference / event
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WHERE IS PM APPROPRIATE?

1.
2.
3.
4.
5.

Five general criteria are:


Unfamiliarity: Major overhaul and not minor
changes.
Magnitude of the effort: Substantially more
resources required.
Changing environment: High-tech industries
Interrelatedness: When a joint effort is required.
Reputation of the organization: In cases where
the risk of financial ruin / loss (market share) is
high.
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WHERE IS PM NOT APPROPRIATE?

Cases not coming under any of


the five criteria mentioned
earlier.
Standardized activities
Routine work
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PROJECTS ARE SHAPED


BY THEIR ENVIRONMENT

TIME

TECHNOLOGY

CULTURAL SYSTEM

SOCIAL SYSTEM

POLITICAL SYSTEM

REGULATORY AND LEGAL


SYSTEM

ECONOMIC SYSTEM

ORGANISATIONAL SYSTEM.
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IMPACT OF ENVIRONMENT (CONTD.)

RESOURCES,
BUDGETS,
METHODS AND TOOLS OF
PROJECT MANAGEMENT
DEPEND ON ABOVE
FACTORS AND CHANGE
ACCORDINGLY.
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CURRENT PROJECT ENVIRONMENT


INCREASING GLOBAL COMPETITION
RAPID TECHNOLOGICAL CHANGE
RAPID PRODUCT OBSOLESCENCE RATE
ORGANISATIONAL DOWNSIZING
BUSINESS RE-ENGINEERING
EMPOWERMENT
FOCUS ON QUALITY & CONTINUOUS
IMPROVEMENT
INFORMATION DELUGE
FASTER COMMUNICATION
INTER-ORGANISATIONAL SYSTEMS
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IMPACT OF CURRENT PROJECT


ENVIRONMENT ON ORGANIZATIONS
Projects are given more importance by the management
for survival of the organization
Increasing need felt to do projects right & successful the
first time
More limitations on resources and lesser organisational
support
Increasing pressure on project management to achieve
quick results
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IMPACT OF CURRENT
ENVIRONMENT ON PROJECTS

Projects are tending to get more & more


complex & large to handle
Projects to be completed ahead of schedule,
always.
Need more flexibility in defining scope,
planning & execution to expand project
benefits and impact
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ADOPTING PROJECT MINDSET

INFORMATION SHARING
- Not just possessing
PROCESS ORIENTATION
- Not just system orientation
NON-LINEAR THINKING
- As opposed to linearity
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PM RESPONSE TO
CHANGING ENVIRONMENT

Need for a managerial approach to deal with problems and take


advantage of opportunities.
Modern era implies interdependency, complexity, rapid and
radical changes and hence elements of uncertainty and risks.
PM is different from management of simpler ongoing,
repetitive, operations where the market and technology are
predictable.
More organic forms of organization are now required to ensure
quick adaptability and rapid response to changing environment
are necessary.
SYSTEMS APPROACH TO MANAGEMENT IS
ESSENTIAL!
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I M PLE M E N TAT I O N
OPERATION &
MAINTENANCE

SANCTION

DOCUMENTATION
SNAG LIST &
FAILURE ANALYSIS
LEARNINGS

& COMMISSIONING

TRIALS

MANUFACTURING
& CONSTRUCTION

PROCUREMENT

& DESIGN

PLAN N I N G

DETAIL
ENGINEERING

AUTHORIZATION

ORGANIZATION

PR O PO S AL

SCOPE
SCHEDULE
BUDGET
RESOURCES

EVALUATION

& DEFINATION

DEVELOPMENT

CONCEPT

PROJECT EFFORTS

DIFFERENT STAGES OF A PROJECT


HAND OVER

C LOSI NG

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PROJECT MANAGER

His responsibility is to plan, organize, direct


and integrate work efforts of all participants
to achieve the set project goals (costs, time
schedules and scope goals).
One person in the organization who is
accountable for the project and is totally
dedicated to achieving its goals.
Leadership qualities are essential.
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DUTIES OF
A PROJECT MANAGER

AS A RESOURCE MANAGER: Manage and


direct project resources to achieve the project
objectives. (MEN, MONEY, MATERIAL, MACHINES,
ETC.)

AS A PLANNING & CONTROL MANAGER:


Develop the project plan and ensure that the work is
completed on time, within budget and with
acceptable quality.
AS A CO-ORDINATOR: Interface with higher
management regarding project review, approvals
and addressing project issues. These must also relate
successfully to line managers and staff.
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What does a project manager do?

DIRECTING
MOTIVATING
PLANNING
SUPERVISING
ADMINISTERING
DOING

:
:
:
:
:
:

TRAINING
COUNSELING

:
:

DELEGATING
:
RESOLVING CONFLICT :

Project Resources
Project Team
Anticipate and plan
The Project Work
Administrative Tasks
Doing some tasks
directly
Project Team
Technical, Business,
Project & Personal issues
Delegate & supervise
Over resources and
schedules
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PROJECT TEAM

Project work is team work.


Project work is accomplished by a group of
people from different functional areas and
organizations.
Size and composition of the team will vary
depending on the project requirements. The
team may be disbanded after the project work
is completed.
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PROJECT MANAGEMENT

PROJECT PLANNING PROJECT IMPLEMENTATION PROJECT CLOSURE


INVESTMENT
DECISION

SCOPE
DEFINITION

IDEA
PROJECT
GENERATION ENVIRONMENT

FEASIBILITY &
RISK
APPRAISAL ASSESSMENT
Market
Technical
Financial
Economic
Ecological

PROJECT
SCHEDULING

GANTT
CHARTS

PROJECT
BUDGETING

NETWORK
TECHNIQUES

Specifications
Deliverables
Time frame
Sensitivity
Organization
Scenario
Budgets
Simulation
Decision tree WBS / CBS

PERT
CPM
CRITICAL CHAIN

Activity based costin


Cost breakdown
Cash flow
Earned value
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PROJECT MANAGEMENT

PROJECT PLANNING

PROJECT IMPLEMENTATION

PROJECT
MONITORING

SCHEDULE
COST
SCOPE
UPDATE
TILL DATE CHANGE

PROGRESS
REPORTING

PERIODIC AD-HOC
REPORTS REPORTS

PROJECT CLOSURE

PROJECT
CONTROL
Control actions
Revised scope
Revised schedule
Revised budget

Current status
ACTUAL STATUS
Time to complete
Activity
Special studies

Cost
to
complete
Completion %
Milestone reports
Earned value
Critical path
Delays
Discrepancy report
Periodicity
Project
Hand over report
Detailing
completion % Committed
Documentation
Summary
Incurred
Failure analysis
Distribution
Balance budget
Learnings
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PROJECT MANAGEMENT
SYSTEM / ORGANIZATION

INFORMAL ORGANIZATION
FORMAL ORGANIZATION
TRADITIONAL

(Functional, location, Product, Customer, Process)

PROJECT TEAM
APPROACH
MATRIX TYPE
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How Project Management


(PM)
Relates to Other Disciplines

Much of the knowledge needed to manage


projects is unique to PM
However, project managers must also have
knowledge and experience in

General management
The application area of the project

Project managers must focus on meeting


specific project objectives
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Project Management
and Other Disciplines

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PROJECT MANAGEMENT V/S


GENERAL MANAGEMENT

PROJECT MANAGEMENT
Long term, usually much more
than one year.
More strategic thinking involved.
PROCESS: Has to be developed
& designed new each time.
Considerable uncertainty and
many unknown factors
New multi-disciplinary team to
be created usually from of
personnel from other
departments.
Projects are initiated to bring
about change. Substantially Large

GM/MANUFACTURING
Short & medium term, usually
within one year.
Focus on minor day-to day issues
Stabilised over a period of time
due to experience, minimum
uncertainty.
Plant & personnel already exist.
Direct control over personnel.
Minimal change is expected in
set routine.
Comparatively smaller

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The Project Management Profession

A 1996 Fortune article called project


management the number one career choice.
Other authors, like Tom Peters and Thomas
Stewart, stress that projects are what add
value to organizations.
Professional societies like the Project
Management Institute have grown
tremendously.
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Project Management Certification

PMI provides certification as a Project


Management Professional (PMP)
A PMP has documented sufficient project
experience, agreed to follow a code of ethics,
and passed the PMP examination.
The number of people earning PMP
certification is increasing quickly.
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QUESTION PAPER PATTERN


FOR
UNIVERSITY EXAMINATION

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QUESTION PAPER PATTERN

Question paper is of 100 MARKS and DURATION will be


THREE HOURS. Earlier it used to be 4 hours.
ANY FIVE questions from usually 7 to 9 will have to be
attempted.
Each question will be of 20 marks.
Question paper will usually have two theory (descriptive)
questions. The contents of these questions is more or less
standardized!! There would normally be a choice (any four
out of six sub-questions) total 40 marks for these two
questions. Last year there was only one theory question.
Remaining questions would usually be a blend of theory and
numerical problem. Numerical may have higher weight of
marks in these questions usually 12 or 14 leaving the
balance for theory.
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QUESTION PAPER PATTERN (contd.)

NUMERICAL problems are mainly on the following


topics:
1. Market forecasting (three types of standard numerical
problems),
2. Project evaluation techniques (Financial appraisal /
discounting techniques, etc.), Break even analysis, etc.
3. Probability Theory and decision tree techniques, risk
management
4. Cash Flows
5. Gantt charts, Work Flow, PERT, CPM or networking
techniques, Cost and Schedule Performance Analysis, etc.
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Numerical problems on
PERT, CPM, CPI, SPI ..

TYPE I on three time estimates

Sequence of activities and three time estimates of duration of


each activity are given. You will have to draw PERT network,
compute slack for each activity, show CP and estimate the
time required for completion.
You will be expected to make use of z tables and estimate the
probability that the project will be completed in specific
number of days. Or
Time required for completion with given level of certainty /
probability (e.g. what would be the duration for completion of
the project with 84.1 % probability?)
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Numerical problems on
PERT, CPM, CPI, SPI ..

TYPE II: Gantt chart, Resource constraints,


leveling, float calculation

Sequence of activities, normal time required and


resource (manpower or budget) requirement are given
You will have to draw Gantt chart, resource graph,
find out free float and total float, total time for
completion, days of over allocation of resources
given maximum availability of the resource.
Rearrange activities suitably for leveling resources.
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Numerical problems on
PERT, CPM, CPI, SPI ..

TYPE III: AoA and AoN network diagrams

Activities, their sequence and duration are given.


You will have to draw AoA and AoN diagrams, find
out total time for project completion, identify critical
path and estimate total floats available on various
non critical activities.

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Numerical problems on
PERT, CPM, CPI, SPI ..

TYPE IV: Crashing activity.

List of activities, their duration and normal costs are given.


Costs of crashing (per day) the activities are given along with
indirect costs (per day). You are expected to find out the
optimum duration and associated minimum cost of completing
the project by crashing activities.
In 2009, this was a numerical of 20 marks!!
Specific deadline for achieving the project completion will be
mentioned. You will have to crash the activities and find out
additional optimum cost and identify critical activities after
crashing.
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Numerical problems on
PERT, CPM, CPI, SPI
..

TYPE V: CPI, SPI.

Total budgeted cost and duration of a project are given. You


will be asked to take a review of the progress of the project
after a specific number of days / moths given the following
data:
Earned Value (BCWP), Actual Expenses incurred (ACWP)
and scheduled earned value (BCWS).
You will have to estimate CPI and SPI and estimated time
and cost to completion.
This question will usually be liked with theory on S curve
and concept of earned value (fairly descriptive question)
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Numerical problems on
project evaluation /
appraisal

TYPE I: (Discounting techniques)

A list of three / four projects will be given along with


their initial investments, project life and expected
annual cash flows.
You will have to rank the projects based on their
NPV, Pay back period, IRR etc. when the companys
cost of capital is given. You may be asked to select a
combination of projects within the overall budget
restriction given.
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Numerical problems on
project evaluation /
appraisal

TYPE II: (Discounting techniques)


Cash flows for a period of five to seven years for a
project may be given (or you will have to prepare them
based on a set of data provided) along with its initial
and periodical investment/s. Given the cost of capital
for the company, you would be asked to comment on
whether the project should be accepted for
implementation or not.
NPV for the project will have to be estimated. Positive
NPV will mean acceptance and negative would mean
that you have to reject the project.
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Numerical problems on
discounting or NPV / IRR
calculations.

TYPE III: (Discounting techniques)

Quotes or initial costs / investments for two machines


/ plants are given along with their operating and
maintenance costs. Machine / plant Life period of
each of the machines is also mentioned.
Given the marginal cost of capital for the company,
you are asked to select one of the machines / plants.
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Review Questions on
Introduction

Give three examples of activities that are projects and three examples
of activities that are not projects. What distinguishes them from
projects? Which activities are difficult to classify one way or the
other?
What are the basic functions of a Project Manager? What qualities,
qualifications and experience would you recommend for an effective
Project Manager? (2000)
Discuss Human Aspects of Project Management in relation to
Authority, Personnel Orientation, Motivation and Team Building.
(2000)
How does project management differ from the management of other
types of manufacturing activities? (2001)
How is Managing a project different from Managing a Factory?
(2006)
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Review Questions
(contd.)

Write short note on main features and advantages of


Matrix type organisation for projects. (2001)
Define Project. What are the main characteristics
that identify and differentiate projects? Do you
think that the specialised project management
techniques can be applied effectively to nonengineering areas of organizational functions?
Explain your answer with suitable examples. (2002)
Define Project Management. What are the main
criteria for assessing success of projects? (2003)
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Review Questions
(contd.)
How is project management different from general
management?
Describe the nine areas of project management identified in
PMBOK.
Define Project Management. State the scope of Project
Management. (2006)
Write a note on Computerized Project Management. (2006)
ASSIGNMENT:
Different types / structures of organization that can be used for
project management, advantages and drawbacks of each type
of organization structure.

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REFERENCES
1. Projects - Planning, Analysis, Selection, Implementation & review
by Prasanna Chandra: Tata Mc.Grow-Hill, New Delhi.
2. Project Management for Business & Technology by John M.
Nicholas: Prentice Hall India, New Delhi
3. Project Management the Managerial Process by Clifford Gray &
Erik W. Larson Third Edition by McGraw Hill
4. Financial Management by M.Y. Khan & Jain, Tata Mc.Grow-Hill,
New Delhi.
5. Project Management Harvey Maylor: Macmillan Publication
(India)
6. A management Guide to PERT/CPM by Jerome D. Wiest,
Ferdinend K. Levy : Prentice Hall India Pvt. Ltd.
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REFERENCES
contd.
7. Handbook of Project Management by Dennis Lock: Jaico
Publishing House, Bombay
8. Project Management - A Systems Approach to Planning,
Scheduling & Controlling By Harold Kerzner: Van Nostrand
Reinhold, New York
9. Project Management using Network Analysis by H. R. Hoare:
McGraw Hill Book Company (UK) Ltd.
10. AMA Handbook of Project Management Editor: Paul C.
Dinsmore
11. Global Project Management Handbook by Cleland, David,
Gareis & Roland
12. Project Management - A Managerial Approach by Jack R.
Meredith, Samuel J. & Mantel Jr.

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